Stroock to Clear Hurdle to Potential Merger With Pension Vote

Stroock & Stroock & Lavan is planning a vote on a buyout of its pension obligation, one of the major hurdles the law firm is facing as it looks for a merger partner amid a slew of partner departures.

The New York-founded firm’s partnership has authorized a complete buyout of its pension fund that would remove the firm’s pension obligations, according to initial reports by the American Lawyer. The decision has been sent to pensioners with a deadline of Aug. 8 to cast their vote.

At one point, the firm’s annual unfunded pension liability was upward of $8 million annually. The firm’s current annual liability sits around $6 million, according to a firm spokesperson.

The firm declined to comment further on the status of merger talks.

Stroock’s pension liability has reportedly been a hurdle for the firm, which has been in merger talks with several Big Law firms, including Steptoe & Johnson, Squire Patton Boggs and McGuireWoods. The firm’s talks with Nixon Peabody recently ended. But with its pension obligation gone, it could make merger talks for the firm easier.

As it searches for a merger partner, Stroock has also had to contend with partner departures.

Following the departure of more than 40 lawyers to Paul Hastings more than a year ago, the firm has seen other defections to Morgan, Lewis & Bockius, McDermott Will & Emery and Schulte Roth & Zabel, among others.

In late July, the firm lost 27 lawyers to Steptoe, including Julia Strickland, managing partner of Stroock’s Los Angeles office and head of its national financial services litigation, regulation and enforcement group, and Michele Jacobson, chair of Stroock’s general litigation practice.

Earlier this week, the firm lost two more partners, including the co-chair of its debt finance practice, to Bracewell.